House passes bill to let insurers offer old health plans

WASHINGTON (Reuters) – The House of Representatives on Friday approved a Republican bill that would allow insurers to continue to offer for another year healthcare plans that do not comply with the higher standards of benefits under President Barack Obama’s healthcare reform law.

The vote in the Republican-majority chamber was 261-157 for the measure sponsored by Republican Representative Fred Upton.

Thirty-nine Democrats supported it despite a White House veto threat. The bill is unlikely to pass the Democratic-controlled Senate and become law.

Obama was to meet health insurance chief executives on Friday, a day after insurers expressed concerns about his plan to help Americans who are losing their coverage because of his healthcare overhaul.

Obama, facing the biggest crisis of his presidency, unveiled a plan on Thursday which would allow insurers to extend by at least one year policies due to be canceled because they do not comply with new minimum requirements under the 2010 Affordable Care Act, widely known as Obamacare.

With several million people facing the prospect of having their policies canceled, Obama is trying to stem the damage to his credibility over his repeated promise that if people liked their policies they could keep them.

At a news conference on Thursday, a contrite Obama acknowledged that he had a credibility problem and had lost the confidence of many Americans on Obamacare, meant to be his proudest domestic policy achievement but now a major political headache.

Obama’s announcement on Thursday was designed to short-circuit a push for more far-reaching changes in Congress and end a growing revolt by Democrats worried that popular anger over the cancellations, and the glitch-ridden online insurance website that is central to the healthcare overhaul, would threaten their re-election bids in 2014.

But insurers complained his fix could create new problems and lead to higher premiums. State insurance commissioners, who regulate the market, said they were also concerned.

The White House has threatened to veto the Republican bill, which it says would roll back progress by allowing insurers to sell new substandard plans that do not provide basic services and offer little financial help for catastrophic health events.

House Democrats on Friday said Upton’s bill was designed to sabotage the larger law.

“They (Republicans) are perfectly satisfied with 40 million Americans having no health insurance at all,” said Representative James McGovern, a Massachusetts Democrat. “If you want to go back to a system where the insurance companies can turn people away because they are sick, by all means vote for this bill.”

In an attempt to alleviate that threat, House Democrats plan to offer their own plan that is similar to a bill from Senator Mary Landrieu, a Democrat from Louisiana, that would allow insurers to renew policies slated to be canceled, a Democratic leadership aide said.

It would also give the Department of Health and Human Services and state insurance commissioners the authority to go after insurers for excessive, unjustified, or discriminatory rates.

STUMBLING OUT OF THE GATE

The Patient Protection and Affordable Care Act, or ACA, aims to provide health benefits to millions of uninsured Americans. It mandates that most Americans be enrolled for health coverage by March 31 or pay a fine.

The most sweeping social legislation since the creation of Medicare and Medicaid the 1960s, the law offers subsidized private coverage to lower income families through new state marketplaces, expands government insurance for the poor and adds new consumer safeguards and cost-saving initiatives for the healthcare industry.

Republicans have consistently sought to undermine the law, saying it is a costly expansion of government that is too complicated to work and will lead to higher healthcare costs.

The law has stumbled in its early phases, first because the website designed to sign up consumers malfunctioned, and then because millions of Americans began receiving notices their existing insurance policies were being canceled – something Obama had promised would not happen.